The Government of Canada’s Statement of Defence to ADCS’s Statement of Claim

This morning we received the Government of Canada’s Statement of Defence to the ADCS-ADCS Statement of Claim.
I know you have all been waiting to see this so am posting it immediately.
Once we have reviewed it, a more detailed post will be made.


Here is a brief response of the Plaintiffs to the Government’s statement of Defence:

2014 11 20 Reply

This is the Gov of Canada’s Statement of Defence to the Amended Claim:

2014 11 10 – Statement of Defence (AGC)

Here is the Amended Statement of Claim, reproduced here for your convenience:

[Hillis] Filed Amended Statement of Claim to the Defendants


CDN citizen, Secretary-Treasurer of Alliance for the Defence of Canadian Sovereignty. Focus on challenging those in the government and compliance industry to do more than rubber-stamp the IGA. Also focus on providing information to CDN "US Persons" to empower them to make their own decisions.

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36 comments on “The Government of Canada’s Statement of Defence to ADCS’s Statement of Claim
  1. JC says:

    I need to read this a bit more.
    8) “…addresses…the elimination of double taxation.” Are they saying here – or will try to get to – that there is no double taxation? “Hear no evil, see no evil” blind acceptance of US Treasury department definition of “double taxation” so narrowly defined as to say taxes that one country has but not the other and then these taxes flow straight on top and that this is not double taxation? Then there is all the tax deferred accounts not recognized by the US, also not recognized any tax paid on them in your host country.


  2. EmBee says:

    I’ll just repost my tiny little thought from Brock:
    RE: Government’s Response to Mr. Arvay and his team

    52. The Impugned Provisions are reasonably necessary to achieve the dual goals of relieving Canadian financial institutions and their clients of the potential for crippling tax and commercial consequences of non-compliance with FATCA and furthering Canada’s international commitments to share information for the better administration and enforcement of taxation laws.

    53. Further, these objectives are of sufficient import to warrant limiting any right which may be infringed and any infringement is proportional to the objectives and to the benefits conferred by the Impugned Provisions.

    Aren’t “crippling tax and commercial consequences” five weasel words which simply mean “economic sanctions”? Ron Paul once stated that economic sanctions are an act of war.


  3. JC says:

    53) So say they. What says the Supreme Court of Canada? Does the Charter allow for any limitations as expressed in 53?

    Otherwise, it appears to be written by the US government, and without imagination simply looking at the law and ignoring basic Canadian government responsibility to safeguard its citizens and residents from other sovereign nations out to interfere into the internal affairs of Canada – implying that other nations may blackmail Canada at any time and that Canada would agree to it – just by looking at the threat and the benefit of avoiding the threat.


  4. […] — If you have opinions or especially suggestions related to our Government’s response to Plaintiff’s Ginny and Gwen’s claims that could be passed on to our legal team, could you also please RE-POST THEM ON OUR ALLIANCE BLOG POST? […]


  5. bubblebustin says:

    “The plaintiffs, and other U.S. Persons, have pre-existing obligations to provide account information themselves to U.S. taxing authorities and, in addition, the majority of the Accountholder Information was already in the hands of a third party – the financial institution.”

    So why aren’t the financial institutions reporting this information directly to the IRS? Oh yeah, BECAUSE THAT WOULD BE AGAINST CANADIAN LAW!


  6. David says:

    @StephenKish @All

    First off–congratulations to you, the plaintiffs, and the Arvay/Gruber team on holding the Gov’t to the 30 day deadline on this iteration!

    Of course it is predictable that the Gov’t is resisting the claims. I haven’t had a chance to review in detail–and of course I’ll be limited in the fact that I’m not a lawyer. However one thing in particular that caught my eye:

    The Gov’t asserts that the IGA eases the burden by “providing that terms generally should be interpreted according to Canadian law, not U.S. law.” Yet elsewhere they say that the Gov’t is aiming the enforcement provisions of the IGA only at “are aimed at individuals who are, or who may be, liable to pay U.S. taxes.” How can a determination as to who is liable to pay U.S. taxes be made except via U.S. law? Doesn’t this put the lie to their assertion elsewhere to be following only Canadian, not U.S., law?

    I’m sure others will have much to say but this is something that quickly caught my eye.


  7. David says:

    This particular assertion, from paragraph 46 of the gov’t’s response, is particularly scary IMHO:

    “Furthermore, the defendants deny that there exists a principle of fundamental justice that foreign tax debts are not enforceable in Canada. “


  8. JC says:

    The Charter is about individual rights not about the rights and well being of Foreign Financial Institutions – what the Harper Government may call Canadian financial institutions. I don’t believe financial institutions are mentioned in The Charter.


  9. Trish – thanks for posting this “Remembrance Day” message from the Government of Canada. I will do a post on this in the couple of days. But, here are some initial thoughts.

    I begin by saying that there is “Good News” and there is “Bad News:.

    First the Good News:

    This is a weak Statement of Defence that suggests that the Government lawyers neither fully understand nor fully appreciate the Charter issues raised.

    Now the Bad News:

    This is a weak Statement of Defence that suggests that the Government lawyers neither fully understand nor fully appreciate the Charter issues raised.

    Yes the Good News and the Bad News are the same.

    This “sameness” is a problem because it suggests great difficulty in explaining the theory of this case to average people. Does this mean that it will be difficult to explain the theory of this case to average judges? This is first and foremost about teaching!

    I have only had time to read the Defence itself. Please understand that a Statement of Defence usually amounts to little more than an “admission” or “denial” of the specific paragraphs of the Statement of Claim. Therefore, most of what the Defence does is to follow the rules of procedure. In that sense, the Statement of Defence helps to determine and clarify which issues/facts are or are not in dispute.

    That said, I find it interesting that this Defence seems to assume that Canada should be obeying a command from the U.S. Treasury. At no point does it contemplate that the Charter does limit what the Government may do. It doesn’t seem to grasp or contemplate that the issue itself is whether obeying the command of the U.S. is a violation of the Charter of Rights.

    Furthermore, the Defence suggests that the Government doesn’t understand that the purpose of constitutionally protected rights is to protect people from their own governments. The Charter is not and never was for the purpose of defending Canadian banks.

    Those interested in understanding how the Charter works (at least in theory) should read some background on the Charter of Rights:

    I write this comment on November 11, 2014 which is “Remembrance Day” in Canada. A day to remember and honor the memories of those who fought against tyranny and government oppression. The whole reason for Human Rights Charters is to establish threshold levels of human rights that and safeguard those rights from political majorities. At the present time, the Government of Canada is a “political majority” of the worst kind – a “majority government” in a Westminster Parliamentary system. The last part of the Government’s Defence makes reference to S. 7, S. 8 and S. 15 of Canada’s Charter of Rights. The Government (what else are they supposed to do) denies any violation of Canada’s Charter.

    What we are witnessing is:

    The Government of Canada and it’s lawyers doing their best to argue that the Government of Canada has the right and indeed the obligation to allow a foreign government, to choose a “specific group of Canadians”, separate that group from other Canadians, define that group as their taxable property and then assist that government is enforcing taxation on that chosen group.

    Or perhaps, the Government is really saying that Canadians of U.S. origin are not and never were Canadians to begin with.

    I will say this:

    After reading this “Remembrance Day” message from the Government of Canada lawyers, I am absolutely convinced that you have done the “right thing” in bringing the Charter lawsuit.

    Absolutely convinced.

    It’s almost as if the language of the Statement of Defence, makes the case for why the FATCA IGA is a Charter violation!

    Consider the following two questions:

    Would Prime Minister Trudeau ever in his wildest dreams have imagined that the Charter of Rights would be used to defend Canadian Sovereignty, against a “once friendly” foreign power, when the Government of Canada has refused to do so?

    Would Prime Minister Trudeau ever in his wildest dreams have imagined that the Charter of Rights would be used to defend Canadian Sovereignty, against the current Government of Canada – a Government that is far more interested in “eroding the Sovereignty of the Nation” by “assisting the Canadian banks?”

    Happy “Remembrance Day” and a special thanks to the Harper Government for giving this Remembrance Day a new and special meaning!

    Speaking of “special thanks”:

    I thank you personally and on behalf of Alliance For The Defence of Canadian Sovereignty for making this lawsuit happen.

    Keep the faith!


    Liked by 3 people

    • trishmoon says:

      thanks for this video of Trudeau & this wonderful observation:
      “It’s almost as if the language of the Statement of Defence, makes the case for why the FATCA IGA is a Charter violation! (makes one wonder who wrote it…)
      I am sure Mr. Trudeau would be horrified and the answers to the 2 questions are “no” & “absoutely NOT”


  10. Tom Alciere says:

    “In further response to paragraphs 17 – 24 of the amended statement of claim, U.S.
    law is beyond the control of the defendant and none of the Impugned Provisions
    impose or alter tax or citizenship obligations under U.S. law.”

    But the defendants do not have to comply with U.S. law either. U.S. law ends at the border.


    • George says:

      Saudi law ends at the Saudi border.

      Canada Law ends at the Canadian border.

      Cuban law ends at the Cuban border.

      Eritrean law ends at the Eritrean border,

      US Law ENDS at the US Border!!!!


  11. Tom Alciere says:

    “15. In the absence of complying with
    FATCA, unless Canadian financial institutions
    completely isolated themselves from
    operations and investments in the United States,
    as well as from FATCA compliant
    institutions elsewhere, they faced
    potentially crippling tax and commercial
    consequences, and payments to their
    clients would also be subject to withholding.”

    So completely isolate. Canada is a big place and there is plenty of
    elbow room for investing Canadian dollars.
    Let SOME banks comply with FATCA, and some refuse. That is
    how it is done in many non-IGA countries:
    I would make sure the bank office is next door to a
    FATCA-compliant bank and there is a post office in
    the lobby to sell U.S. dollar money orders if the customer
    needs them. The cheques will still clear through the
    FATCA-exempt Bank of Canada (which has no GIIN)


  12. Cheryl says:

    Thank you ADCS. I rest a little easier knowing that good and honorable people are supporting us and fighting this injustice.

    Liked by 1 person

  13. Tom Alciere says:

    “39.. Nothing in the Impugned Provisions results
    in different treatment of U.S. citizens resident in Canada
    than Canadian citizens resident in Canada
    who may themselves be liable to pay U.S. taxes. ”

    ..but Canadian citizens deemed under a foreign law to be U.S. citizens, resident in Canada, ARE treated differently from Canadian citizens resident in Canada who are NOT themselves
    liable to pay U.S. taxes.


  14. Tom Alciere says:

    Keep in mind, everybody, that lawyers have a duty to represent their clients to the best of their ability.


  15. Tom Alciere says:

    “49 a. Information reported under the Impugned Provisions and
    provided to the IRS is protected by the provisions of Article
    XXVII of the Convention such that it can be disclosed
    only to those involved in the assessment, collection, administration or
    enforcement of taxes covered by the Convention; ”

    Uncle Sam says “Trust Me.” (BTW if FBAR is not covered by the
    Convention does this mean FBAR victims can take a sigh of relief?)


  16. Wondering says:

    The harm to Canadian financial institutions outside of the IGA is part of the government’s SoD.

    There is legal precedent in Canada that the effects of foreign laws are a BUSINESS RISK that Canadian banks take on voluntarily.

    In Van deMark vs. Toronto Dominion Bank [1989], a Canadian court decision established two important principles:
    – in a conflict of laws, Canadian law has primacy over the law of a foreign jurisdiction where the bank also does business; and
    – Canadian banks may not act as foreign revenue collectors or enforcers.

    That judgement stated:
    “There is no dispute between the bank and Kenneth Van deMark and the dispute, if any, is between the bank and the Internal Revenue Service of the United States. The effect of what has occurred is that a Canadian citizen has placed assets in a branch in Canada of a Canadian chartered bank. The bank also does business in the United States and is being threatened by a United States authority.”
    “One must sympathize with the position of the bank but that position is the result of its election to carry on business in more than one country and that cannot influence the application of Canadian law.”
    “In any event, while acceptance by the bank of a penalty imposed in the United States might seem to be a hardship, the effect of permitting the Ontario branches to defend the applicants’ claim on the basis of the bank’s liability in New York State would be to enforce indirectly a claim for taxes by a foreign state… and one that has, so far as the evidence discloses, not even given rise to a New York or Federal Court judgment.”


  17. nervousinvestor says:

    An amalgam of my rantings on the IBS site re the Response of the Defendants.

    Gosh – it is going to take some time and analysis to compare the Claim and the Response. Wow ! I hope that Mr Arvey and crew can deal with this. I think that we need Prof Christians and her colleagues to assist.

    In the meantime, the statement above:

    “In response to paragraph 84 of the amended statement of claim, the defendants say that any privacy interest in Accountholder Information that may exist is minimal.

    The plaintiffs, and other U.S. Persons, have pre-existing obligations to provide account information themselves to U.S. taxing authorities and, in addition, the majority of the Accountholder Information was already in the hands of a third party – the financial institution.”

    is a miserable nasty statement.

    Not minimal to persons that get identified as “US Persons” and their information gets leaked to some Jihadist …. Not minimal to persons that get identified as “US Persons” and their information gets leaked out of the US Official database and their identity stolen …. Not minimal to persons that get identified as “US Persons” and their retirement savings get wiped out …. Not minimal to Canada when those extorted tax dollars get sucked south of the border and the families thus decimated become charges on the Canadian Government purse.

    So the extortion threat is big enough to scare the Canadian Government out of honoring the Canadian Constitution and its Charter of Rights. By God we need someone with testicular fortitude like a Sir Winston Churchill to stand up to this insanity.

    What nasty cynicism to claim that because your financial accounts are with a Bank then you have lost rights to privacy of that financial information …. is the author of the Response insane ?

    As for the nonsense about pre-existing conditions …. If a person escapes slavery in another country and flees to Canada should Canada then repatriate that person to the slave owning country when it finds out that the slave broke the law there in escaping ? Perhaps all Eastern Europeans (and their descendants) who escaped the Nazis or the Communists and ended up in Canada ought to be repatriated to their original countries as they doubtless broke the laws there in the process of escaping? What tripe. So Canadian policy is henceforth that no matter how evil the regime that one is existing under one may NOT break their laws or rules and seek refuge in Canada ? What horse pucky.

    Then to compound matters:

    “In response to paragraph 82 of the amended statement of claim, the defendants deny that the Impugned Provisions expose the plaintiffs to a deprivation of liberty or security of the person.

    In the alternative, if the Impugned Provisions expose the plaintiffs to any deprivation of liberty or security of the person, which is denied, such deprivation occurs in accordance with the principles of fundamental justice.“

    My God I never dreamed that I would see such nonsense written by a Canadian Official …. such vicious, cynical (or ignorant perhaps – I dont want to use the term deceitful) mis-application of principles. I am sure that Arvay can tear the author of this tripe a new poop chute (metaphorically speaking of course).

    Stephen. You say above that “The Arvay team has ten days to file a reply — IF they consider that any reply is necessary.” What is the procedure if they do NOT consider a reply necessary:

    1.Proceed to argue the matter orally in front of a judge or a panel of judges (surely not a jury) (if they consider the Government case so weak or see other strategic purpose)?
    2.Abandon the case due to the “strength” (if so b the case – I cannot tell as I am not a lawyer) of the Government’s case?

    If they do not respond then how do their rebuttals and argument as to superiority of their case appear in the record for the Supreme Court … as transcripts of the oral argument? Presumably there is no further opportunity to introduce additional facts or positions after the court of first instance?

    @Embee – You and I are on the same page there with the “weasel words” and the clear terror evident in the minds of the Government. Brutal Economic Sanctions used as a bludgeon to impose terror in otherwise free people. These may well be viewed as a form of modern warfare. I wonder how the Media will play this? Honestly or as a rah rah section for the Banks?

    @Only a Canadian – you are correct …. the news reports were that the US declined to participate in GATCA. Now there is another can of worms.


  18. stephenkishadcs says:

    Here is part one of analysis by @Anne Frank:

    Anne Frank says

    November 11, 2014 at 10:46 am

    “I have reviewed the Statement of Defence and would generally comment that they have not exactly stretched themselves. It is fairly pro forma, but there are some interesting glimpses into the strategy that will be deployed. All should please note that the Defence is primarily to plead FACTS not make arguments of law. As a Charter challenge based on a law, this case will be primarily fought on the field of legal arguments with facts – including hypothetical facts – providing only a very loose framework for the debate. In short, the Defence appears sparse because it is and it is because they have chosen to keep much of their legal strategy to themselves for the time being. There is good and bad in that – the good of course is that, there being few facts to debate, the obstacles to getting an early hearing date will be that much fewer.

    This being said, I thought I’d provide a few comments:
    para 8: Inclined to comment “why bother?”. They plead that the tax treaty addresses the elimination of double taxation. Perhaps the more accurate statement is that the tax treaty purports to set the goal of the elimination of double taxation and then, by permitting the maintenance of CBT exceptions (US insistence on this is one reason it has so few treaties), effectively contradicts itself and fails. The treaty reduces some aspects of double taxation is the best that can be said of it. Further, the USG has retained the right to override the treaty by subsequent measures which it has chosen to exercise on numerous occasions.

    para 11: this is really a pretty important concession. It notes that FATCA is aimed both at actual and POTENTIAL US taxpayers. This concession is repeated in a number of other places in the Defence. The importance of it is this: it may be one thing to say that Canada, as a matter of (bad) public policy is going to help the US assess (but not collect? – more on this later) taxes that are due under its own law upon Canadian citizens or residents. It is another thing entirely to say that Canada will round up hundreds of thousands of likely suspects, violate their privacy rights and allow the IRS to sift through their data to see which ones might warrant greater interest. By definition, the net hauls in the “guilty” and the innocent. Violating the Charter rights of these latter innocent parties to help find the guilty for a foreign power takes the Charter analysis to a whole other level. Of course we would challenge the premise of “guilty” head on as well, but my point is the Defence concedes from the outset that FATCA (and by extension C-31 which enforces it in Canada) will turn up data relating to NON-US taxpayers and forward same to the US. That is a really, really huge point and one which sets the Charter barrier all the higher for the Defence to justify under s. 1. By way of aside here, I would gently criticise the Statement of Claim to a minor degree on this point. Para. 24 of the Claim implies that a CLN is the ONLY way in which US double tax liability can be extinguished via relinquishment. That is true today under the Tax Code, I agree. However, prior to the 90′s, there was no obligation to seek a CLN in order to have relinquishment recognized for tax purposes. Anyone with a “grandfathered” act of relinquishment is also not a US taxpayer but would have indicia that would cause FATCA to sweep them up and turn them over. Thus two categories of by-catch have data that C-31 turns over to the IRS in violation of their privacy rights: spouses, business partners and other parties having some financial connection to a “US Person” without necessarily knowing the tainted ethnic or national status of their partner; and (ii) former US Persons who relinquished by do not have and neither have nor ever had an obligation to obtain, a CLN.
    Also note – and this is not unimportant – FATCA turns people over to the Treasury FBAR/FINCEN police (who happen to be the IRS as well). The FBAR regulations have little to do with tax. Their original justification in the 70′s was to monitor foreign exchange transactions that were allegedly undermining the US dollar (as if it hadn’t been undermined by Nixon abandoning Breton Woods and the convertibility of foreign central bank dollar reserves into gold). The in terrorem fine and penalty threats come primarily from this completely abused and misused statute primarily although obviously the Tax Code has its share of nasty compliance tools as well.

    para 15-16: pretty much admits that extortion and threats are the reason for C-31. The corollary of this is that Canada chose to sacrifice the Charter rights of the few to preserve the trading and commercial privileges of the many. That will be an interesting debate under s. 1! One is always slow to make parallels to the Nazis, but it is hard to avoid sometimes. Was Vichy justified in filling trains with French Jews to avoid further sanctions from the Nazis? If not in those circumstances, where exactly does one draw the line? The whole point of the Charter, after all, is to protect minority rights from being sacrificed to the convenience or whim of the majority. Section 1 invites a weighing of the rights of the minority against the legitimate desires of the majority to be sure, but will FATCA come out a winner when the only Canadian interest at stake is the right of Canadian banks to carry on business in the US without interference (especially when they arguably already have that right – and tools to defend it – under NAFTA)? Bear in mind that work-arounds, while perhaps adding transaction costs, are eminently feasible. The Bank of Canada, for example, could be the clearing house for US dollar transactions. Canada US trade could be denominated in C$ instead of US$ or indeed even in Euros for that matter. Commerce would find a way around FATCA, there is simply no doubt whatsoever. It is doing so right now in the countries that are too poor to be able to afford an IGA with the US. Canada didn’t stand up to the US, so we’ll never know whether the FATCA bluff could have been called by the largest trading partner of the US. In short, the s. 1 weighing exercise can’t simply assume 30% tax = commercial armageddon for Canada. Rather, it means significant adjustment cost, bother and uncertainty, but whether this “cost” was greater or lesser than the billions of costs FATCA is imposing with Canada’s blessing is another matter (and note, those expenses are tax deductible IN CANADA and thus costing OUR government real money). THIS is what was avoided by caving in and tossing the minority to the wolves. This is the true s. 1 debate that Mr. Arvay will join.

    para. 18 – discussion of tax treaties implies that C-31 and FATCA is right in line with these. In fact, it is hugely different in kind. The tax treaties allow a case-by-case automatic exchange of information about named individuals and are conditioned by safeguards including such things as reciprocity and specificity. I will only give you information for a particular taxpayer if you request it by name and with enough particularity to establish your right to it. It is the difference between a search warrant directed at John Doe living at 123 Main Street and a warrant to search every house in town to see what you can find. There’s bound to be a tax cheat somewhere in town, let’s search every house until we find one.

    para. 20-22: If Justice is going to plead reciprocity from the US as justifying C-31, they have just left themselves open to a finding that lack of reciprocity is a virtual certainty. The US eschewing GATCA ought to leave little doubt. OECD’s GATCA, of course, is premised on RBT not CBT and the US wants only what it wants, not what anyone else wants. The US is in fact the repository of billions if not trillions of “safe haven” funds being hidden from governments of countries all over South America, Africa, Asia etc.The US banking policy is “don’t ask and certainly don’t tell” and FATCA has not changed that. The US has more foreign deposits than Canada does to be sure and is in no hurry to lose them.

    para 32 – the premise of this one is amusing. The Agreement “eases the burden” of FATCA. Actually, C-31 CREATES the burden. What they are doing is crowing that the burden could have been harsher if Canada had agreed to harsher burdens. Be happy I’m only chopping off your hand – I could have chopped off your arm if I wanted to! The whole statement is absurd and irrelevant. FATCA is US law and has no application in Canada. It NEVER could have been applied in Canada by any FI since application of it in Canada by a Canadian FI would have violated Canadian law. That was the status quo until C-31 changed it. Behaviour which was formerly illegal – refusing to deal with Canadians or turning over private Canadian financial data to a foreign government – became LEGAL under C-31. The fact that C-31 could have been still harsher does not add much to the analysis of whether C-31 passes Charter muster. The fact that Canada got the standard form template IGA with no greater benefits that were received by any other country (large or small) that signed one is also a pretty obvious rejoinder here. The IGA contemplated listing exempt account types like RRSP’s. Canada didn’t bargain for it – they got to list their exempt accounts on the form the same way everyone else did. The accounts will still get confiscated by the IRS – just one step later (after reporting of the other accounts to the IRS by the CRA causes the hapless “US Person” to be threatened with jail and personal ruin for the crime of having lived outside the US in compliance with local laws).

    para 32(f) is a personal laugh riot. Pleading that Canadian law is somehow paramount here is opening them up to ridicule. The Agreement is stated to be paramount and the Agreement incorporates US law, including US law as it changes from time to time, in more places than I can take the time to count. The US has changed its citizenship law on a number of occasions as many here have pointed out. Canadians have been variously “in” and “out” of the US dragnet at the whim of these changes over time. Green card holders who return to Canada in ignorance of the IRS’s precise code for abandoning their Green Card for tax purposes – a not inconsiderable number as well – are a chapter unto themselves. Under the US tax code, they have perpetual tax obligations without even the theoretical possibility of residence in the US.

    para. 37 – the question has to be asked: if the Exchange of Information is NOT in aid of collection of taxes, what on earth is the point? What is enforcement of tax law if not collection? Tax law does not seek information for information’s sake. It seeks information for money’s sake. Why is Canada sending private data to the IRS which the IRS certainly tells Congress is useful for collection purposes – to the point of including incremental revenues estimated to be raised from it in the US budget – while telling the Canadian court that it is just about exchanging information not money? This is not two scientists sharing data that will help grow the common wealth of scientific knowledge of mankind after all. This is private financial information which has only one use: to threaten the owners of that data within things they don’t want to be threatened with. Not a convincing argument.

    para 38 – note again, persons who are or “potentially” are subject to US tax. It may be relevant to US tax, but then again, it may not. Besides, tax of course is on INCOME and we all know that having a bank account with money in it is pretty much the LAST PLACE ON EARTH you can look to for income in any event! On a more serious note, having assets is not the same as having tax liability. Tax liability is actually based on income – I wasn’t joking when I said that – and account information is a tool to audit, not to claim. In short, it is a fishing expedition even when aimed at a particular person as opposed to a class of them. Homelanders don’t report assets, Canadians don’t report assets. They do report interest income over a threshold. FATCA is a quantum leap in intrusiveness and breach of privacy in search of tax that MIGHT be owing, not that IS owing. If, as the Defence notes, the tax treaty already eliminates double taxation of Canadian residents, what possible purpose is served by further exchange of information?.

    para. 39 – keep your blood pressure in check. Keddy wrote this one (contrasting “US citizens resident in Canada” with “Canadian citizens”. If you feel like a “mudblood” reading that, raise your hand)! Once again, all “Canadian citizens” who “may” be liable to pay US taxes are caught. True enough. They are caught if they have enough US ancestry to be caught (Charter anyone?), as well as if they have had the misfortune to marry or go into business with one. Note again the “may” be subject to US tax argument. Anyone who “may” be subject to US tax also, by definition, may not. Unstated in all of this is that the persons who “may” be subject are thrown to the US wolves and forced to defend themselves in US courts under US law to establish that they were never subject to US law in the first place. Catch 22. Might one expect the Charter to allow Canadians to have their rights and obligations arising out of their income and activities IN CANADA be subject to Canadian courts and Canadian law?

    para 49, 52 and 53 – this is a doozy. Makes very clear that the violation of the Charter rights are only as much as was needed to protect the commercial interests of banks carrying on business outside of Canada. Wow. That is stark, but at least puts the debate on the proper plane.

    (nb- this whole section of the Defence is what I referenced above: pretty much a blanket denial saving the legal arguments for later)

    By and large, the real arguments are not going to come out until they file their written arguments just before the hearing. This is interesting is how LITTLE it does say. They really show no signs of intending to elicit much by way of evidence.”


  19. stephenkishadcs says:

    Here is part two of a comment by @Anne Frank:

    Anne Frank says

    November 11, 2014 at 1:04 pm

    “@Stephen Kish – thank you. Truth be told, my paragraph-by-paragraph comments were essentially directed at his team as I know they will be in the phase of gathering up and processing comments in order to consider their next steps. Let me try a few more comments of a more general nature aimed at a more general audience.

    As I noted earlier, there really is nothing new here and indeed considerable reason for optimism that an early hearing will be possible as I see little sign that Justice intends to delay while it seeks to gather evidence from experts or otherwise. They seem happy enough to make their fairly basic arguments from the grounds that they have. So let’s examine the case through Justice’s lens for a moment if we can.

    This is a Charter case. Every Charter case essentially involves a two step process. One, is their a prima facie or “at first blush” breach of the Charter? Onus on the plaintiff. If so, can the breach be justified under s. 1 (onus Justice). Where the Charter breach is discrimination, for example, does the statute discriminate? Well, of course, ALL statutes discriminate to some degree and obviously not all discrimination is prohibited by the Charter. People under 19 may not purchase alcohol. Black people may not sit at the front of the bus. It is not hard to see that both discriminate, but one is founded upon potentially reasonable pubic policy, the other on unreasoned bias. Both are subject to examination.

    When the dust settles, the Crown’s essential case boils down to two assertions:
    1. Information exchange is not harm per se (no prejudice); and
    2. We had to do it because the consequences would have been worse.
    Of these, only the second is really substantive.

    Information exchange is harmless. The assertion can’t stand up. A search warrant to open up my banking records or cell phone records for audit and inspection clearly violates my right to privacy and yet amounts to no more than an “exchange of information” between the police and my bank or cell phone provider. Drug dealers, child pornographers, even jihadists routinely complain that evidence of ACTUAL violations of Canadian law obtained in breach of their privacy rights must be excluded from court because it was obtained in violation of the Charter. Violating my privacy rights to investigate an actual breach of Canadian law requires that safeguards be respected. Warrants to examine all banking records of all Canadians are not obtained. Individuals against whom there are reasonable grounds for suspecting complicity in the commission of an offence are named in a warrant. A judicial official examines the evidence and issues or refuses the warrant. Even tax treaty exchanges of information are subject to a prior filter:

    Under the tax treaty, information only applies to “such information as is relevant for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes to which the Convention applies insofar as the taxation thereunder is not contrary to the Convention.” Bear in mind that under the Convention, all residents of Canada are entitled to a deduction from US tax for all taxes paid to Canada on the same income whereas limitation under US tax law (including AMT) deny those deductions in whole or in part to Canadian residents. Also bear in mind that bank account, life insurance and stock broker account information as to ASSETS (as opposed to, for example, interest income in the year of the sort referred to on a T-3 or T-5) is not information regarding income. Assets might be relevant to COLLECTION of course, but the Defence quite adamantly denies that collection is in view here.

    We are way outside the collection of information that is in the scope of existing treaty. This is a quantum leap beyond that. I can’t emphasize enough that FBAR, FINCEN and the like are NO PART of the tax treaty. They ARE information sweeping exercises. I would argue that they likely breach US law given the original purposes of those statutes and the completely different use to which they have been put in relation to non-resident US Persons. That, however, is for another day. The point is that Canada has agreed to collect data for the US in relation to US taxes under the Convention and, given the promise of full tax credits for Canadian-source income, there is every reason to believe that only a fraction of the people whose information is being exchanged would have any TAX obligations whatsoever. They MAY have FINCEN, FBAR violations of course – but Canada has never agreed to collaborate on that. So what we have is the functional equivalent of turning over all cell phone records so that drug dealers can be searched for.

    The other argument on “where’s the harm, it’s just information” of course is common sense. Why on earth do you think people are declining to provide their names, are interviewed in the press under pseudonyms, etc? Their fears are not irrational – they believe that disclosing their private information to the US will lead them to be in real peril of jail or personal financial ruin. Congress and the IRS want the information in order to act upon it. They way they want to act upon it can be amply illustrated by a sampling of OVDI stories. Collection is the whole point of the process – gather more money. The money is earned in Canada by Canadians who have fully complied with Canadian law. We protect drug dealers and jihadists from violations of their right to privacy when our own government is pursuing them and yet have to argue for protection of Canadian law from being pursued by a foreign government?

    Remember, Charter rights at their core are always about balancing the state’s interest in something against the individual’s. The Charter puts the onus on the state to justify, which onus is tougher to discharge the more important the individual interest. Privacy is one of those “per se” interests. I have a right to keep my privacy and I have very little need to justify that to you or anyone. Where the state interest is so slight that we won’t even enforce the obligations to the foreign state that we are helping them to discover, how do we justify overriding the individual’s right to privacy?

    What are some of the harms that come from breach of privacy even if not accompanied by assistance in collection?
    – receipt of demands for payment and risk of enforcement of those demands in other countries;
    – threats of penal sanctions which may limit mobility even within Canada. If the US puts someone on their warrant list, they can cause planes from Toronto to Vancouver to land in North Dakota (depending on jet stream movements, Canadian flights may routinely chose to fly over US airspace to conserve fuel).
    – impairment of credit rating and financial freedoms in Canada caused by such demands,
    – threats of fines and penalties unless data of one’s employer or business partner are disclosed under FINCEN and FBAR regulations and loss of career opportunities in Canada that follow from this obvious disability

    I suspect our community could fill out that partial list pretty quickly.

    The second argument – in essence the lesser of two evils, the devil made me do it, extortion, what have you – this is where the heart of the matter lies. The problem for Justice lies in the fact that they have left themselves open to W.C. Fields rejoinder (I think it was he). After asking a woman if she would sleep with him for a million dollars, he famously quipped “now that we know what you are, it’s just a matter of price”. At its core, Justice is alleging that the FINANCIAL cost to Canada of not enforcing US law in Canada was too high. Accordingly, Justice claims, it carefully sacrificed as few Canadians and their rights as they thought they could get away with in order to avoid the threatened sanctions. Stated differently, the commercial interest of Canadian financial institutions in carrying on “business as usual” in New York was worth more to Canada and the Canadian economy than the rights of the one million or so Canadians potentially offered up as sacrificial lambs to the US enforcement machine.

    The problems with this argument are many. Charter rights are not about counting pennies or comparing my loss to your gain. We can’t put shoplifters to death because it costs too much money to put them in jail. Even shoplifters have a right to life and security of the person. It would be a LOT cheaper if we dispensed with most trials and simply declared guilty all people who are PROBABLY guilty or about whom there is some evidence. This business of trying people before judge (and sometimes jury) and proving beyond a reasonable doubt is pretty darned expensive. Why not just have a prosecutor review the file and sentence everyone who looks guilty? Finding innocent people is really expensive and time consuming and lets some guilty people go free. You can see pretty quickly how the money argument – it would have cost too much to do it differently – is not going to carry a lot of weight in a Charter case. A Canadian court will not easily fall into the WC Fields trap.

    This does not mean the argument is silly and will be tossed summarily. They will be coming up a pretty steep hill though. They will try to argue that sanctions would have brought Canada to its knees, but I will bet good money that they wasted almost NO time in trying to figure out alternative means of mitigating or avoiding that harm.

    I would argue that the sanctions threat was always a hollow one. As noted earlier, commerce would NOT dry up if the world just said no. We can do business in C$ and let US banks come here to buy them. We can do business in Euros, Renminbi or whatever. The Bank of Canada could set up a clearing agency to handle fx transactions as a middleman and avoid sanctions on Canadian banks. Canadian banks could sue for confiscation of their investments in the US contrary to NAFTA. Or the US might have blinked faced with the utter hopelessness of imposing their will on a world economy that simply says “no” to say nothing of the very real risk of sanctions on US interests (impose a special tax on US FI’s equivalent to all witholding tax paid the prior year by Canadians). There were many roads not taken – a cross-examination of Finance officials will doubtless show that the other roads were not even examined.

    Finance may have feared the harm of not complying with FATCA to Canadian banks. I doubt that they properly counted the harm of FATCA compliance to Canada though. Canada is spending billions to comply and that money is going to result in higher costs to consumers and lower taxes to government (those compliance costs are deductible of course resulting in lower taxes to Canada). That is not Mr. Arvay’s argument to make of course. He will be focusing on the fact that you can’t sacrifice Peter’s privacy and anti-discrimination rights to Paul’s commercial interests in New York. The fact that Canada spent so little energy trying to avoid the collision of Peter and Paul’s interest – by lobbying seriously to block FATCA a la James Jatras’ advice, by considering or implementing countermeasures, etc will make their argument untenable.

    Here is where the contrasting approach of Canada to logically identical foreign laws of Eritrea and the US can be made use of. Eritrea has almost no economic clout that it can wield against Canada. Thus, when Eritrea seeks to collect “information” from its diaspora with a view to demanding taxes, Canada reacts with outrage. Eritrean Canadians have a right to protection from Canada. Eritrean diplomats are expelled unless they promise not even to suggest that Eritrean Canadians comply with Eritrean law. Even distributing forms from the Consulate and telling people how to send money from abroad is cause for sanctions. When the US seeks Canada’s help in making far more serious demands of its far more numerous diaspora in Canada, Canada’s reaction is entirely different. It is hard to avoid WC Fields’ accusation on those facts.

    Interesting as well is the one thing the Defence did NOT say: go ahead and renounce. That insulting rejoinder, oft repeated in Parliament, must appear a whole lot less attractive as an argument now that the US has effectively impeded if not banned renunciation by jacking up the fees and adding year long waiting lists.”

    Original post on Brock

    Liked by 2 people

  20. Cheryl says:

    Thank you Anne for this very clear explanation


  21. I think the 18 page Defence can be summed up in Mike Allen’s famous three words: “Congress has spoken.”

    Liked by 2 people

  22. MuzzledNoMore says:

    I would be pleased if Mr. Arvay and his team could explore the fact that the internationally recognized principles described below have been completely ignored by the Canadian government in its acquiescence to the demands of the United States. The following is from one of my many communications with the Canadian government prior to its signing of the IGA.

    “To deal with the increased prevalence of the instance of dual citizenship in the last century international norms were established. Ironically, my first quote is from the U.S. Department of State Foreign Affairs Manual Volume 7: Consular Affairs:

    “’It is a generally recognized rule, often regarded as a rule of international law, that when a person who is a dual national is residing in either of the countries of nationality, the person owes paramount allegiance to that country, and that country has the right to assert its claim without interference from the other country.’ (emphasis mine)

    “The ‘rule’ referred to above is an expansion on Article 4 of the 1930 Hague Convention on Certain Questions relating to the Conflict of Nationality Laws which is still in effect. My second quote is an interpretation of this same Article by the Home Office of the United Kingdom:

    “’…the practical effect of this Article is that where a person is a national of, for example, two States (A and B) and is in the territory of State A, then State B has no right to claim that person as its national or to intervene on that person’s behalf.” (emphasis mine)

    “There is nothing in either of these sensible statements to suggest that the matter of taxation is to be considered an exception. In short, in Canada the dual Canadian/American citizen is a Canadian, and a Canadian only. The FATCA IGA contravenes this long-standing international practice by placing greater importance on the Canadian-resident dual citizen’s relationship to the United States than on his relationship to Canada, the country of his dominant nationality.”


  23. bancdelasteroideb612 says:

    Fearing Up for #FATCA– with all Necessary Propoganda from the Administration

    As the administration and friends were looking for someone else to fund both their deficit and their new domestic jobs bills (such as 2010 HR 2847 Jobs for Mainstreet Act), they looked around for new ways to get money from people they didn’t like. However, they needed to get it from people who couldn’t fight back. They also needed to make sure that no one else would come in and defend those people.

    G.Obombda Barracks (G.O.B. or OB for short) asked his team: “What is the largest segment of US citizens that can’t fight back?” His team answered: “There are 7.6 million US citizens living outside the USA, and we make it difficult for them to vote–as difficult as we can, that is”

    OB: “Any others?” Team: There are 10’s of millions of legal immigrant residents, whom we don’t need to please because most of them can’t vote.


  24. Anne Frank says:

    I thought I’d add a further reflection on the very real and crippling impact of US Person-hood upon life and career prospects of Canadians so tainted.

    By way of preface, readers will have noticed the Plaintiff’s included a claim that C-31 implementing FATCA interferes with provincial jurisdiction over property and civil rights. That is actually a good old fashioned constitutional claim and doesn’t involve the Charter at all. In essence, our Constitution divides all of the jurisdiction of governments between Federal and Provincial governments (essentially, the two combined have all potential jurisdiction of government, subject to the curbs of the Charter). The Plaintiffs argue that FATCA/C-31 trample upon Provincial jurisdiction in that they interfere in the contract between financial institutions and their consumers (property and civil rights in the Province). Justice’s rejoinder is to plead that this is being done under treaty, invoking Ottawa’s foreign relations jurisdiction. I won’t get carried away analyzing the cases on this – it is complex to be sure. For the lay reader, it might be useful to bear in mind that the courts have been wary of allowing Ottawa to use its foreign relations power to boot-strap its way into provincial jurisdiction. Among other weaknesses, the argument advanced by Ottawa does not acknowledge that the IGA is NOT a treaty, at least not as far as the US is concerned since the it is done purely under executive authority without Senate authority and all US treaties need to be ratified by Congress. The Tax Treaty IS a Treaty under US law but, unfortunately, its terms expressly do NOT contemplate FATCA (information sharing on a case-by-case basis, no concessions to US jurisdiction over Canadian earnings of Canadian resident citizens claimed by the US as citizens). This will not have escaped Mr. Arvay’s team.

    Let me add a note about the second class status of US Person’s that C-31 would enshrine. Remember, something in the order of 15% of all Canadians are non born in Canada, so creating a sub-category of Canadians by virtue of place of birth or national origin is not a small matter without consequence. We have already seen that as a result of C-31, certain Canadian banks have taken to routinely asking on new client forms for the country and place of birth of all new customers. Neither Finance nor OSFI have taken steps to stop this practice which is certainly not prohibited by C-31 and indeed is arguably implicitly called for or at least justified under the due diligence measures from the IGA incorporated thereby into Canadian law. Place of birth has NEVER mattered in Canada for anything that I can recall nor can I think of a single place other than a passport application that requires it. Recall that the consequences under US law of being a US person include the requirement to file detailed reports on financial holdings and transactions of one’s spouse (unless you allow US law to dictate how your family’s finances will be managed – see the painful stories recounted in the Democrats Abroad FATCA brief), one’s business partners (who may be ignorant of your birthplace and the consequences thereof on their privacy and financial affairs) and one’s employer if employment involves management of bank accounts or finances. Until FATCA, there was no reason for any employer to make such inquiries. The reality is that FATCA and C-31 are putting real Canadian’s lives under real disability WITHIN Canada already. I know of a Canadian born to US parents (who committed the folly of registering their child at birth) who is a partner in a small business with several others. The business is undergoing a corporate reorganization in order to deal with a critical financial crisis. Their accountant has told them the re-organization cannot be done if of the partners are US Persons. This friend came to me for help because he was faced with either lying to his partners and denying his status or putting the whole business at risk by disclosing his dark family secret. I could not advise him to lie, but I strongly suspect that is exactly what he did given the consequences. This is but one simple example, but one which is being repeated over and over again across the country. The victims are afraid to come forward and identify themselves for obvious reasons. This is not imaginary or fanciful – to the contrary, it is easily understandable and tangible. I have another friend who is a partner at a large law firm with offices in the United States. There are a dozen or more firms in Canada with offices in the United States. Disclosure of his family origins would put his firm at risk of making trust fund and other disclosures to the US government that would violate Canadian law. His choice – hide his origins or resign his partnership. The problem is the same with any law firm since offices in the US only raise their awareness of the issue, purely domestic law firms with US Person partners will have the same trouble as a signing authority in the hands of a US Person is enough to bring the US Treasury and FBAR’s etc down on their heads. The point is that Canadian career prospects of Canadians with an undesirable national origin are plainly and obviously affected. I fully expect that Finance assumed FATCA and C-31 would be an expensive to administer but effectively meaningless bit of legislation since Canadian financial institutions don’t track national origin. Unfortunately, FATCA is requiring them to do so and C-31 and justified them in obeying a noxious foreign law in Canada. This infection is spreading from its primary site – financial institutions doing business in the US – to the broader economy as employers and others are forced to alter their way of doing business to the new reality that C-31 has endorsed. US Persons are to be avoided – they are expensive to have as customers and catastrophic to have as partners or employees in positions of trust. The good news is I suspect that US Persons can still take a civil service job (and might thereby lose their tainted status without having to pay the exorbitant renunciation fee).

    Remember – Canada has people from every corner of the globe living here and becoming citizens. Each has a homeland and every country tries its hand at “long-arm” jurisdiction (applying its domestic laws to people outside its borders) to a greater or lesser degree. I am sure a survey of North Korea’s books will find any number of prohibitions on poking fun at the Dear Leader or his progeny. When Canada starts to allow foreign law to apply to Canadians IN Canada in regards to their activities WITHIN Canada, we have started down a very, very dangerous path. The Eritrean example has been raised numerous times (since there is no principled basis to justify enforcing US CBT but expelling Eritrean diplomats for even thinking about enforcing CBT from Eritrea in Canada. There is no simple principled basis to decide which foreign law is “good” and which is “bad”. In the case of FATCA, we already have a Treaty, endorsed by the US Senate, which acknowledges that the US gets no help in collecting taxes from Canadian citizens. I’ll leave out for the moment whether, under the Charter, Canada could protect citizens and not permanent residents. The point is that our existing law – to say nothing of the century-old “Revenue Rule” which is part of Canadian common law as well as centuries of tradition protecting privacy- all suggest that FATCA is a breach of numerous fundamental if not constitutional principles. If we allow FATCA to be enforced in Canada, where does the line get drawn?

    Liked by 3 people

  25. nervousinvestor says:

    May I suggest a clear link from the ADCS-ADSC web site to this blog. I keep searching there and finding only the link to the Facebook thing … and I do not do Facebook.

    I saw a lonk not so long ago of a service that enables people to Tip or Pay small amounts on line with little trouble …. I think that this would be good for this appeal …. I will try to re-find the link … perhaps others might also try.


  26. Tom Alciere says:

    @Anne Frank ..good post BUT for the sake of accuracy…

    “and all US treaties need to be ratified by Congress.”
    No, they get ratified by the U.S. Senate and it requires a 2/3 supermajority.


  27. badger says:

    Struck by a number of good points made on the IBS thread in addition to the very fine analysis by Anne Frank.

    – Point by From the Wilderness, and bubblebustin on the IBS ADCS thread is a good one – they mention the likelihood that the Canadian government is taking, or has taken US or US based legal advice either in anticipation of a legal challenge to the IGA and enabling legislation or after the fact, in response to the ADCS challenge. Advice from either US based lawyers in private practice – ex IRS/Treasury, from a firm like the one they invited to speak to them in Cabinet, or, perhaps the US government offered IRS/Treasury resources in aid of FATCA – a way of speaking and acting directly or indirectly in Canada by proxy through the Harper government’s mouth/actions, or some version of the above. Given that the same stock Treasury spokespersons’ phrases and tactics (remember Mythter Stack?) kept coming up from the officials in country after country to rationalize their signing of IGAs and abrogation of their own country’s sovereignty and laws, it would not be a surprise to find that the US is keeping a hand in – most especially because Canada was and is an important FATCA domino and the outcome of this challenge will be of interest to other IGA signatories.

    Possibly fodder for a FOI submission to find out? Certainly would provide support for the argument that Canadian sovereignty was sacrificed on the altar to foreign interests if the US advised on defense of the IGA before and after it was signed and enabled here. And if not germane to the ADCS challenge, would certainly be a potent additional motivator for generating interest and support for the challenge. Even a heavily redacted FOI answer would be damning.

    – Very good point raised on IBS re FBAR not being tax information covered by the pre-existing terms of the treaty. Particularly when it is information on accts such as life insurance and pensions, where any income is merely potential, not actual.

    – Actual letters and statements on record from Levin, Harvey, and any other quotes from IRS/Treasury about deliberate design of FATCA to capture and share information without restrictions or notice or recourse, with any and all US agencies and bodies they so choose, and without limitations placed on tax return info and records/forms is valuable – shows that the US has never intended this to be only about determining POTENTIALLY taxable interest and income. Also applies to the FATCA and FBAR demand for info where the accts not directly owned solely by a USPerson.

    – So it is enough to be ‘POTENTIALLY’ a UStaxableperson these days in order to justify ignoring the Charter and our Constitution? ALL Canadians, and the rest of the world is then ‘potentially’ a US taxpayer given how broadly they define that, and that the definition is open to any changes the US chooses to make to citizenship, immigration, and tax laws – and employ US override via last-in-time and savings clause. How can Canada possibly raise a defence to the IGA that requires it to adopt definitions and terms in an agreement which only the US – a foreign government has the power to determine – not under any control or limitations by the Canadian government? It is a moving target. So, the Canadian government defence is that it is in Canadian interests to issue the US a blank check in that regard – drawn on the Canadian assets of Canadian taxpayers?

    – regarding the red herrings re this FATCA IGA and legislation as precursor to OECD Common reporting – OECD has already stated that it will NOT be based on citizenship or similar pseudocitizenshipstatus, but on actual residency – NOT the imaginary residency that US taxation invents and assigns to those on whom it asserts parentage and birthplace based involuntary taxation. Plus, neither the US nor Canada have signed on to the Common reporting yet – so, why the FATCA IGA so far in advance?

    – as to the ‘elimination’ of double taxation, what is the Obamacare investment tax then?

    Liked by 3 people

  28. bubblebustin says:

    Really appreciate the analysis so far!

    One thing in particular that Ann Frank noticed continues to play on my mind – how Harper’s government in their response didn’t mention anything about how Canadians can eliminate, or at least mitigate the affects of the IGA by renouncing US citizenship – an option that is now cost prohibitive for many Canadians. It’s on public record that the government actually viewed it as a viable remedy for the problem they’ve created, yet at the whim of the U.S., it’s no longer available for many Canadians. Just drives home the fact that once a nation embarks upon the slippery slope Canada has, they no longer have control over their own destiny, and any assurances they give don’t amount to a hill of beans when another nation is calling the shots. Can we sue them for saying that?

    Liked by 2 people

  29. stephenkishadcs says:

    Anne and Bubblebustin,

    I have passed your updated comments on to Mr. Arvay and, as general information on the subject, to a Canadian national news entity interested in doing a story on what we are all about.

    Part of the injustice is the fact that (as you say) many (most?) innocent Canadians will be unable to free themselves from unwanted citizenship because of the different penalties imposed by the U.S. and the inability (e.g., in the Toronto area) to book a renunciation appointment. The Toronto U.S. consulate confirmed to me personally that we are “low priority” and that this will not change.

    But you both, as I understand from the comments on Brock, have differing views on the citizenship-based taxation legislation that might be introduced by the Republicans during the next year or so. I don’t feel that this important discussion has ended and will start a post in this blog on the topic.

    Liked by 1 person

  30. John Canuck says:

    Wow. Some statement of defence. I expected something hard-hitting, not a pathetic “The Americans made us do it” whimper.
    The overbearing focus on the need to protect Canadian banks is irrelevant to the challenge. Let’s admit the IGA thing was to protect banks AND skirt our privacy laws by cloaking this as part of the tax treaty. The tax treaty did not foresee the wholesale fishing expeditions of personal banking information, and to suggest it allows it is a stretch. Indeed, it appears there is scant understanding by whatever law firm did this as to how far-reaching this insidious thing is. For example, the notion of who is considered a US citizen is studiously avoided by saying “that’s a US issue”. I agree…within the US. On reading it, I actually wondered if the plan was to lose this thing so the government could crawl back to the IRS and say “gee, we tried, but the darn Constitution screwed us up.”
    If I was paying this legal bill, I’d want my money back! Come to think of it, the sad thing is I am.


  31. SoninLawofGus says:

    Regarding paragraph 46,
    “[T]he defendants deny that there exists a principle of fundamental justice that foreign tax debts are not enforceable in Canada.”

    Why bother to have a country at all, then? And we really don’t need a separate justice system. Further modifications are in order.
    – The defendants deny that there exists a principle of fundamental justice that foreign laws are not enforceable in Canada.
    – The defendants deny that there exists a principle of fundamental justice that foreign Constitutions are not enforceable in Canada.

    Or even:
    – The defendants deny that there exists a principle of fundamental justice that foreign parking tickets are not enforceable in Canada.

    Liked by 1 person

  32. nervousinvestor says:

    Am unable to connect to since early this morning ….maybe even since last night. Wondering what is going on.


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